Rain Man Eco

Hey, who's the market after all?

2011-12-12T12:55:00.002-05:00

It is somehow funny that every time I see or read or hear that CNBC or WSJ is reporting that how and why market is responding to whatever piece of news out there.

I just can't help wondering - are these guys actually know who the market they are referring to is? People think they know what they are saying. But most of the time, in my humble opinion, they really don't.

Just like those who spread the rumors always claimed it is the market that knows the ultimate answers, press and media are reporting as if the market is always correct and efficient. Some scholars thought the sheer existence of asymmetric information makes it impossible for the market to be efficient all the time.

Personally, I thought the market is always wrong at any specific moment. And now, by the records of recent years, I begin to believe the market is rather manipulated for the most of the time. And it's not a delightful experience to see the market is turning more and more like a battlefield of all sorts of speculators. They have fun, but the pleasure is unfortunately all theirs.

In the recent several months, I've seen lots of volatility in markets all around. One extreme example was the U.S. market. Every trading day of those volatile session, you can almost be sure that there would be an accelerating upwards or downwards in the last half an hour or the last hour.

Was that a sign that some flash trading machines finally found some safe-haven trading patterns that programmers can be sure of? It's comparably easy to go one way since your trading rivals felt a bit tired after an exciting day.

Did those acceleration simply occur because it was necessary to modify the market sentiment a bit more or a bit less, so that guys can rake up some profits or cut some losses in the derivatives market?

I don't know. But neither will make me feel comfortable.

Why do Americans and Britons urge ECB to do more?

2011-12-12T12:34:00.002-05:00

Almost all know that a patch on the Euro mechanism is probably the best thing the Europeans can get so far.

Britons chose to stay away from the new treaty. And Americans THINK that the only thing Europeans need to do is to unleash the liquidity power of European Central Bank.

Months ago, people around the world were whispering that it was more and more like a currency war, or a competition to see who's gonna be the worse currency than others. Now it turned out to be an intrigue to kill a rival.

If ECB gives up and becomes another printing machine like Fed, it doesn't matter how many rounds of Quantitative Easing Fed is going to deploy. Neither does it matter how much the greenback is going to de-value effectively, because the currency at the other end of exchange is depreciating as much as well.

If Euro is really heading to its doomsday, let's see what will happen. No one single currency in lieu will ever be able to take the place, and 26% of the world reserve currency would have to exchange to the U.S. dollar thereafter. In other words, in plain English, dollar wins.

Frankly speaking, I have no preference to anybody that is racist and arrogant, but this is not about personal feelings at all.

It's been a tough year

2011-11-25T11:56:00.002-05:00

don't know what to say. don't know what to do. have been scared several times.

The bright part is that I shredded some 20 pounds.

Human is just human. Appearance is deceiving.

review of something poetry

2011-01-17T10:54:00.001-05:00

As we know, There are known knowns.

There are things we know we know.

We also know There are known unknowns.

That is to say, We know there are some things We do not know.

But there are also unknown unknowns, The ones we don't know, We don't know.

—Feb. 12, 2002, Department of Defense news briefing, Donald Rumsfeld, Secretary of Defense

sound or unsound premises

2011-01-17T10:52:00.001-05:00

Quote from Ben Graham: “You can get in more trouble with a sound premise than an unsound premise because you'll just throw out the unsound premise.”

Buffett quoted it from time to time, but until recently, I have not realized how profound it meant.

Gas saving Tips for driving

2011-01-14T15:24:00.002-05:00

Here are the tips of gas-saving driving habbits, suggested by GasBuddy.com, and quoted by Cindy Perman of CNBC.
I think it's worth a try. So, On Your Mark...Get set...Drive!
http://www.gasbuddy.com/gb_tips.aspx

1.Avoid High Speeds
As your speed increases, your aerodynamic drag increases in an exponential fashion. Driving 62 mph (100 km/h) vs 75 mph (120 km/h) will reduce fuel consumption by about 15%.
2.Do Not Accelerate or Brake Hard
By anticipating the traffic and applying slow steady acceleration and braking, fuel economy may increase by as much as 20%.
3.Keep Tires Properly Inflated
Keep tire air pressure at the level recommended by your vehicle manufacturer. A single tire under inflated by 2 PSI, increases fuel consumption by 1%.
4.Use A/C Sparingly
When the air conditioner is on it puts extra load on the engine forcing more fuel to be used (by about 20%). The defrost position on most vehicles also uses the air conditioner.
5.Keep Windows Closed
Windows open, especially at highway speeds, increase drag and result in decreased fuel economy of up to 10%.
6.Service Vehicle Regularly
Proper maintenance avoids poor fuel economy related to dirty air filters, old spark plugs or low fluid levels.
7.Use Cruise Control
Maintaining a constant speed over long distances often saves gas.
8.Avoid Heavy Loads
Remove the sand bags from your trunk in the spring and pack lightly for long trips.
9.Avoid Long Idles
If you anticipate being stopped for more than 1 minute, shut off the car. Restarting the car uses less fuel than letting it idle for this time.
10.Purchase a Fuel Efficient Vehicle
When buying a new vehicle examine the vehicle's rated fuel efficiency. Usually choosing a small vehicle with a manual transmission will provide you with great fuel economy.

China's online retailers

2010-12-27T12:34:00.002-05:00

Two weeks ago, two IPOs in New York got some real stir across the financial world. One is YOKU, so-called China's Youtube plus Hulu. The other is DANG, claimed to be China's Amazon.

Today, Wal-Mart and five other companies have agreed to invest $500 million in Beijing-based 360buy.com, one of the fastest-growing online retailers in China.

I think the real winner will be an unknown name that has yet had its IPO - tmall.com, a subsidiary of Alibaba, and a standalone online shopping mall used to be part of taobao.com.

No schedule yet known for its IPO, or when or where or even whether it will do its IPO.

But one thing for sure (are you ready?), the MBA graduates from Harvard really means nothing in business. Why do I say so? Look at eBay's acquisition of EachNet several years ago. Decision makers from bother sides were Harvard MBA graduates. Oh, they all used to work in American consulting firms as well.

So far, yeah, ye got it right, so far, eachnet has never ever made a profit. And you have taobao, 360buy and all others doing this online retailing in China.

the trustworthy journalist now

2010-12-27T12:02:00.001-05:00

Decades ago, American public trust Walter Cronkite, now it is Jon Stewart.
And people do so for good reasons.

Wall Street is asking for the QE3

2010-11-26T13:39:00.002-05:00

Shortly after the announcement of QE2, the $treet is already talking about the QE3. According to the minutes of the last FOMC meeting, I think it's more than likely there will be a QE3, maybe 4 or 5.

By high-lightening the Euro-zone potential crises, such as Ireland, Portugal and Spain, Wall Street is pushing up the U.S. Treasuries rather than selling them out in the wake of QE2. In the meantime, people bet on the rebound of dollar against Euro. And there is also some trading opportunities to short the commodities after pushing them to record highs.

All in all, Fed will have to stage out a QE3 when the QE2 will phase out in the middle of next year.

I am right again---only the financial institutions could make money thanks to the quantitative easing at the moment of zero-bound interest rate.

rumors

2010-11-17T11:08:00.000-05:00

“A lie can travel halfway around the world while the truth is putting on its shoes.”

--- Mark Twain

Job 29:22

2010-11-12T11:45:00.001-05:00

After my words they spoke not again; and my speech dropped on them.

---Job 29:22

Wall Street is looking for QE3 and QE4

2010-11-08T10:53:00.000-05:00

In the wake of QE2, Wall Street is already looking forward to QE3 and QE4. At the first glance , it looked ridiculous. But on a second thought, I am afraid it could be more than likely.

Republicans take control of House of Representatives in Congress. None of the congressmen or senators would like to link his/her name with tax raise bills at this particular moment. Obama has already revealed his possible compromise to crave for the wealthy tax payers, along with the middle-class.

To cut the welfare or not, it means less tax revenue for the federal and states level. What does this mean?

I'm afraid the U.S. Treasury will have to sell more debts, in the meantime, Fed will print more to buy those securities so as to keep the borrowing cost as low as possible. Unless, well, they could create another Greece-like crisis to trigger the "flight to quality" again.

In terms of China's monetary policy, monetary supply amounts to 70 trillion yuan, but the debt of regional governments has also climed to a record high, 8.5 trillion yuan. So rate hikes in China will mean either more tax burden across the economy (usually they will tax the poor more and the rich less), or more non-performing assets on the banks books. I don't know which one is worse. I say it won't be the rate hikes so long as they are NOT stupid enough.

The Beginning of the End

2010-11-03T13:25:00.005-05:00

On March 18,2009, I told some Americans that it was the beginning of the end for the greenback as the world currency.

Initially, they argued that it is the world reserve currency which is different from the world currency.

A bit later, some Wall Street pros predicted that Euro would collapse very quickly in the wake of Greek crisis. Obviously they thought my assertion was an equivalent of a favor of euro.

They didn't get it. Check this out:

http://www.bloomberg.com/news/2010-11-02/nokia-metro-spur-160-jump-in-yuan-settlement-china-credit.html

This is what I talked about.

It is reported that trade settlement in RMB would climb to 200 billion for this year. Although Yuan is not exchanged freely, China's central bank has signed bi-lateral monetary swaps agreements with other countries' central banks.

Although people might think of such a competition as a one-way conspiracy and sold a cheap lemon called "The Currency War" to the public, guys in the business community know it too well that it is no more than a cause we all knew for a very long time --- bad money always drives out good.

Yet, the same cause could actually have many possible effects.

So far, Fed has been cutting the interest rate to 0-0.25%, pumped $1.7 trillion into the financial system, aka. the liquidity trap.

Today, Nov 3, 2010, Fed announced another round of Quantitative Easing II to buy $600 billion worth of securities till th end of 2011.

Happy Birthday to me.

Gold Not An Investment

2010-10-29T14:56:00.000-05:00

Lately Warren Buffett answered the question to Ben Stein, now a columnist for Fortune Magazine.

http://money.cnn.com/2010/10/18/pf/investing/buffett_ben_stein.fortune/index.htm

"Look," he says, with his usual confident laugh. "You could take all the gold that's ever been mined, and it would fill a cube 67 feet in each direction. For what that's worth at current gold prices, you could buy all -- not some -- all of the farmland in the United States. Plus, you could buy 10 Exxon Mobils, plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?"

The emphasis is put on the earning power rather than whether gold hike in price is a bubble or not.

Gold has never been an investment, no matter whether it's priced at $1300 an ounce or not.

fixed or floating exchange rate

2010-10-29T14:52:00.002-05:00

Recently, a lot of people have a bit of attitude toward the U.S. monetary policy. I can understand that. But instead of calling the U.S. policy makers shameless, we'd better pay attention to the China's domestic inflation from one other viewpoint.

Bernanke and Geithner had to follow the "declining dollar" policy because that's what is right in both politics and economics. Politicians calling for a declining dollar not for no reasons. And the U.S. debt amount is simply huge by any means. So the convenient way to calm down the sentiment and meanwhile to delay a ticking bomb was to let greenback go down in value, relatively and now absolutely.

As Bill Gross put it in his monthly Investment Outlook for November, "Public debt, actually, has always had a Ponzi-like characteristic."

Talking about the Fed cut and Quantitive Easing One and Two, I have lost counts for how many times Wall Street has been bullying Fed since the credit crisis began. Economy and employment, all excuses.

But take a look at what China has been doing. I am sure that's way from playing innocent. Just as Warren Buffett said, "You can't just do one thing in economics."

Fixed exchange rate is also a doulbe sword. For so long China has been generating trade surplus with the U.S. , exchange rate is fixed, dollars earned has never left America. Superficially, China is a beneficiary of the undervalued yuan, but the truth is far from it.

By sticking with the undrvalued rate, China's exporters could actually exchange more RMB with the state-owned banks than they should if the currency was not undervalued. But it now sounds more and more like a hidden form of inflation for quite a while, namely, decades. And this inflation really has nothing to do with the instructive interest rate or ordinary monetary supply by China's central bank. Sounds amazing, dosn't it? Well, no one economist has ever mentioned it.

Take a yearly trade surplus of US$230 billion and a 5% undervalued RMB for example, China's exporters get 80 billion RMB more at banks, should the currency stayed undervalued. Isn't this also money printing? I seriously think so. And as I always said, inflation is acumulative. Net Present Value depends on not only the discount rate (inflation rate), but also how long the time period will be.

High Inflation will be a status quo for quite a while.

Thanks to the 10 trillion yuan credit in the form of new loans last year (eight trillion of which went into the real estate bubble), and reluctence to raise the interest rate by any means, China will have its own high inflation that will be hurting for almost everyone.

For individual investors, we will be fine, as long as we are investor rather than the other way around. But that's another story.

Believe it or not, China's central bank would not raise the rate for as many reasons as they should on contrary. One reason not widely discussed is the financial standing of the reginal governments. By the end of June 2010, the overall debt incurred by regional governments amounted to roughly 8.5 trillion yuan. Now, 25 basis point of interest rate rise by the central bank would cost those borrowers 21 billion yuan of MORE interest expense per annum. And it's compounding.

That reason also applies to America. The only difference is those Americans got themselves into more troubles like auction-rate-arrangement with financial houses. One more reason for central banks NOT to raise the rate consecutively.

how to bully Fed, again

2010-10-27T11:39:00.003-05:00

Fed will announce its plan on Nov.3.

Traders have been anticipating the Fed would buy between $500 billion and $1 trillion in Treasuries to drive interest rates lower and encourage lending and spending. A report in The Wall Street Journal said the Fed's bond purchases might amount to a few hundred billion dollars over several months, which would fall short of those predictions.

one thing for sure, only the financial institutions could make money so long as the cheap than mud money continues to float.

once again, rather than "follow me" or "after you" , this time, it will be "none of your business."

how the U.S. ranks

2010-10-27T11:26:00.003-05:00

Thomas Friedman's column on The New York Times, Oct.26 - Can't Keep A Bad Idea Down.

In 2005, National Academies responded to a call from a bipartisan group of senators to recommend 10 actions the federal government could take to enhance science and technology so America could successfully compete in the 21st century. Their response was published in a study, spearheaded by the industrialist Norman Augustine, titled “Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future.”

Charles M. Vest, the former M.I.T. president, worked on the study.

Here is the result:
sixth in global innovation-based competitiveness, but 40th in rate of change over the last decade;

11th among industrialized nations in the fraction of 25- to 34-year-olds who have graduated from high school;

16th in college completion rate; 22nd in broadband Internet access;

24th in life expectancy at birth; 27th among developed nations in the proportion of college students receiving degrees in science or engineering;

48th in quality of K-12 math and science education;

29th in the number of mobile phones per 100 people.

The story about U.S. corporate tax avoidance

2010-10-22T12:59:00.003-05:00

as reported by Bloomberg News

“Double Irish” and “Dutch Sandwich”

high corporate tax rate countries

a median effective cash rate of 28.3 percent in U.S.federal, state and foreign income taxes.

The combined national-local statutory rate is 34.4 percent in France, 30.2 percent in Germany and 39.5 percent in Japan.

transfer pricing

paper transactions among corporate subsidiaries that allow for allocating income to tax havens while attributing expenses to higher-tax countries.

Income shifting commonly begins when companies sell or license the foreign rights to intellectual property developed in the U.S. to a subsidiary in a low-tax country. That means foreign profits based on the technology get attributed to the offshore unit, not the parent. Under U.S. tax rules, subsidiaries must pay “arm’s length” prices for the rights -- or the amount an unrelated company would. therefore, corporatations need to negotiate with IRS.

Double Irish

such an arrangement relies on two Irish companies. One pays royalties to use intellectual property, generating expenses that reduce Irish taxable income. The second collects the royalties in a tax haven like Bermuda, avoiding Irish taxes.

Dutch Sandwich

To steer clear of an Irish withholding tax, payments from the Dublin unit don't go directly to Bermuda. A brief detour to the Netherlands avoids that liability, because Irish tax law exempts certain royalties to companies in other EU- member nations. The Dutch entity doesn't have to employee anyone,while its effective management is located in Bermuda.

(Since the 1960s, Ireland has pursued a strategy of offering tax incentives to attract multinationals. One other aspect of Ireland's appeal is that it allows companies to shift income out of the country with minimal tax consequences)

Bermuda

The subsidiary managed in Bermuda usually changes its legal form of organization to become a so-called unlimited liability company. Under Irish rules, that means it's not required to disclose such financial information as income statements or balance sheets.

Casanova's rule for seduction everywhere

2010-10-21T10:52:00.002-05:00

"Tell a beautiful woman she was intelligent and an intelligent woman she was beautiful."

That's Casanova’s rule for seduction.

But could we say it's merely a trick of seduction? Take the seduction part away, it works fine as well.

China raised the interest rate

2010-10-19T14:33:00.002-05:00

China hasn't raised the rate since 2007. but a 25 basis point raise is hardly any meaningful measure to curb the inflation.

in the meantime, China has been lately talking about raise the inflation target to somewhere between 4-4.5%. Wow!

i just wonder how long will the markets figure out what's actually going on. but as usual, when people out there get the picture, i'm afraid it's already been too late.

let's see what's really possible here.

more hot money inflows to China as the interest rate has gone up;

shortly after "gold down, dollar up," Fed has to do "more" to keep the dollar subdued in value, an excuse to support the U.S. export.

once again, the market is effective because the market is wrong all the time.

a close look at Mr. Buffett's wallet

2010-10-18T11:05:00.002-05:00

some people told me that weeks ago , Mr. Buffett along with Mr. Munger and Mr. Gates had an interview with business channel of China's national television.

I haven't watched it. but according to people watched it, something interesting at the early part of that program.

Mr. Buffett showed his wallet to the anchor. Only a brief look so quick that the camera couldn't close up in time though, to the surprise of the viewers, it was a Green Card of American Express in that wallet.

Yes, the green charge card with an annual fee of 95 bucks, not gold card, not platinum , nor centurion.

I would say that 's a bona fide pro's pick.

Charge card is easy to control and understand than most of the credit card. But in China, charge card is simply unavailable. American Express has to co-issue credit cards with local partners.

And the only low end credit card that could have my interest --- the Blue Cash is only available within the U.S.

I don't know what's wrong with China's financial regulators. You can encourage consumption by allowing charge card at the same time. And it's a lot healthier.

liquidity trap now an excuse to print money?

2010-10-18T11:00:00.002-05:00

i won't be surprised so if it is an economist in the Ivory Tower who said it. but it is not.

Charles Evans, president of the Chicago Fed, said in Boston on Oct. 16, that “in my opinion, much more policy accommodation is appropriate today” because “the US economy is best described as being in a bona fide liquidity trap”, a point where ultra-low interest rates and high savings rates conspire to make monetary policy ineffective.

i just wonder how much Fed would announce to print in the Nov.3 statement.

value of higher education

2010-10-15T11:56:00.000-05:00

on Nov.12,2009, Warren Buffett along with Bill Gates, held a town hall event at Columbia University, NY. CNBC live broadcast from uptown Manhattan. Becky Quick was the lovely host.

during the Q&A session, Mr. Buffett sounded more like the "education" in Columbia was a total waste of time if two of his mentors HADN'T BEEN teaching there.

I couldn't believe my ears, but a second look at Mr. Buffett's side, the most famouse Harvard drop-out of all time - Mr. Bill Gates. So much for the American higher education.

Charlie Gasparino's new book

2010-10-07T15:01:00.002-05:00

Bought and Paid For: The Unholy Alliance Between Barack Obama and Wall Street, focuses on what he says is an all too chummy relationship between Wall Street and 1600 Pennsylvania Ave. Charlie Gasparino, a former On-Air editor for CNBC, and now a senior correspondent for Fox Business.

Charlie was the one who broke the original TARP story when he was working for CNBC.

I think it would be a good book , written by a great journalist. and I really don't think guys in CNBC, Wall Street Journal , or even Dealbook of The New York Times would ever write anything like this.

In an interview with Yahoo Finance, Gasparino says “I don’t consider Wall Street the epicenter of capitalism, I consider it the epicenter of ‘crony’ capitalism.” Touche.

It is also interesting for me to think that hat if Oliver Stone went to Gasparino for consultancy rather than the Wall Street guys like a hedge fund manager. The movie Wall Street 2 would be a touchdown to the ugly truth, maybe.

Buffett at Powerful Women conference this year

2010-10-05T11:32:00.000-05:00

Buffett, at Fortune Magazine's Most Powerful Women conference in Washington, Oct.6

Wall Street "does a lot of good things and then it’s got this casino."

“It’s like a church that runs a raffle on the weekend.”

“People have a propensity to gamble, and it gets made easier and easier for them.”

“One of the problems we still have is we have unbalanced incentives for managers of huge financial institutions.”

“I don’t look at Wall Street as ‘evil,’” he said last year. “I look at Wall Street as given to huge excess sometimes. I don’t want to get rid of it. We need something to allocate capital and distribute securities.”

“It’s quite clear that stocks are cheaper than bonds,” Buffett said today. “I can’t imagine anyone having bonds in their portfolio when they can own equities.”

Four Decades of Argument and Illustration

2010-09-26T14:09:00.003-05:00

The New York Times is celebrating the 40 anniversary of the Op-Ed page.

http://www.nytimes.com/interactive/2010/09/25/opinion/opedat40.html

here is the introduction by the Editors

On Sept. 21, 1970, readers who turned to the last inside page of The Times's main section found something new. The obituaries that normally appeared in that space had been moved, replaced by something called Op-Ed. The vision of John Oakes, the editorial page editor, and Harrison Salisbury, the eminent foreign correspondent, Op-Ed was meant to open the paper to outside voices. It was to be a venue for writers with no institutional affiliation with the paper, people from all walks of life whose views and perspectives would often be at odds with the opinions expressed on the editorial page across the way. (Hence, Op-Ed - Opposite Editorial.)
And so here we are. Four decades and nearly 15,000 pages later. This special anniversary section features artwork and adapted excerpts from a tiny fraction of the writing that has appeared on the Op-Ed page over the years, as well as selections from commentary published exclusively online.
Here is some of what the outside world has had to say.

I always find the NYT obituaries interesting to read. And like the lyrics of Staying Alive --- an old Bee Gee song sings" We can try to understand The New York times effect on men."

Congratulations to the Times for both the state-of-the-art and the history-of-the-art at the same time.

racism could be anywhere

2010-09-26T14:01:00.002-05:00

A racist could regard himself as eloquent, smart or humorous, but down deep, he is a racist without question.

Ron Atkinson, an English football manager, said in 2005:

"The Chinese people have the best contraception in the world - but I can’t understand why there’s so many of them because their women are so ugly."

where was I at the moment

2010-09-24T13:49:00.005-05:00

it's interesting to try to recall where I was when the Flash Crash on May 6.

during that 20 minutes, I was on Wall Street, walking through NY Fed to Trinity, a little stop by the Federal Hall and in front of NYSE.

I had no idea of what was happening. As a matter of fact, I was fancying how Erin Burnett would look in person. ooh, she looks so much like my Mom...when young. Blue eyes, pity.

That's all what I can recall.

Lincoln was good

2010-09-24T13:49:00.001-05:00

On Nov. 21, 1864 President Abraham Lincoln wrote a letter to Colonel William F. Elkins. He said,

"I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned, and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed."

but , Lincoln didn't say what could, would or should be done by the Democrats even though they have seized the power of both Executive and Legislative for a while.

Wall Street 2, premiere in NYC

2010-09-24T13:06:00.003-05:00

several days ago, Oliver Stone, the director, said on The New York Times that Josh Brolin, the actor, reminds him of Dimon because he's good-looking, referring to Jamie Dimon, the CEO of JP Morgan Chase.

today, Mr. Stone said in an interview with CNBC:

"They all are sharks," Stone said of the characters in the film. "But no one was black and white, except for maybe Josh Brolin, who played the evil banker. He was molded after Robert Rubin and Jamie Dimon — the kind of arrogant guys who have dominated the economy for so long calling for deregulation and then of course, when the s**t hit the fan, they run to the government to get their bailout. It's socialism for the rich and free enterprise for the poor."

Oh, I can't wait any longer to watch that movie.

deflation or inflation, who talks?

2010-09-24T12:53:00.002-05:00

economists, central bankers may get what financial firms want --- to ensure the capital hungry industry that money printers will be in position to prevent the make-believe deflation from happening.

but obviously that's not what markets worried about. look at the movement, only one answer for sure --- people are worried about the inflation more than ever. equity, commodity, etc. all the same direction.

and it will be too late for the stupid money that is now in the sovereign debt markets to realize they got the wrong safety net.

more away from BlackBerry

2010-09-24T12:45:00.002-05:00

more firms now covers the data plan bills of their employees if they chose the iPhone rather than BlackBerry.

but i think it will not be too long until the Android handsets have to be added into the list.

the only drawback now is the battery, same as iPhone. but one thing for sure, if Nokia or BlackBerry couldn't get it , their existence as a smartphone player will be questioned, seriously.

revenue from International sales, S&P500 by sectors

2010-09-22T13:05:00.002-05:00

Cotton is in shortage

2010-09-22T13:01:00.001-05:00

reported by Bloomberg

Global cotton use will rise to 120.5 million bales in the year that started Aug. 1, the USDA( the U.S. Department of Agriculture) estimates, outpacing production of 117 million bales and becoming the sixth year that usage exceeds the world crop.

Global cotton inventories will slump 3.3 percent to 45.4 million bales at the end of the marketing year on July 31, the USDA forecasts. A bale weighs about 480 pounds.

U.S. retail sales and business inventories for July2010

2010-09-14T13:38:00.002-05:00

a report released on Sep 14, for July 2010.

business inventories: $1.38 trillion

inventory-to-sales ratio: 1.26 months

the inventory-to-sales ratio represents how long it takes the businesses to clear shelves at the current sales pace.

money making and losing movies

2010-09-14T13:28:00.003-05:00

in terms of profit margin.

the most profitable:

My Big Fat Greek Wedding (2002)

return on investment 6150%

budget(inflation adjusted) $6 million

gross revenue $369 million

gross profit margin: 98%

the most money losing:

Cutthroat Island (1995)

Net Loss, inflation adjusted $147 million

total cost $115 million

worldwide theatre gross $10 million

net loss (actural)$105 million

gross profit margin: -1050%

Intel and Microsoft, both out

2010-09-13T12:51:00.003-05:00

before the age of PC, no one knows why Intel and Microsoft could be so popular. now it looks like an interesting moment to question whether their historical mission or march has come to a crucial end.

Apple's iOS is based on FreeBSD, Google's Android is literally designed out of the kernel of Linux, although neither would declared their origins so loudly.

Both the OSes are growing fast for mobile devices , which barely use the CPUs from Intel either.

Maybe both Intel and Microsoft could generate business by selling the stuffs to HP or Dell as usual. But as for the handset devices, they are nothing but out from now on.

My current mobile runs on Windows Mobile 6, which is really not so good.

When I bought my 13-inch HP laptop, it was pre-installed with Windows Vista, which is good-for-nothing. And there is really no other choices left for consumers like me.

Since Google's Android is gaining momentum, in the meantime , mobile devices could do almost anything I can think of online or offline, I asked myself - why do I need the combination of Intel and Microsoft any more?

other options for Dell

2010-09-05T10:18:00.002-05:00

maybe a bit remote from the external storage maker that Dell might be interested in, but they could be re-shaped into a player as well.

1. Akamai

a bit too remote, but if the cloud computing is what is attractive, it could be a candidate.

2. SGI

Rackable Systems acquired this mess in 2009, and it's still a mess, admittedly.

corrected - external storage systems

2010-09-04T12:47:00.001-05:00

Bloomberg's report. total market is $19 billion.

other players in the arena:

HItachi

Pillar Data Systems

Xiotech

Compellent Technologies

Isilon Systems

Comm Vault Systems

Pillar, 85% held by Larry Ellison, has an revenue of $50 million. too small for Dell.

NetApp, with a revenue of $4 billion, is obviously too big.

sales of external data-storage systems

2010-09-03T13:05:00.002-05:00

according to a report by IDC, top rankers of the market share are

1. EMC 25.7%

2. IBM 13.6%

3.HP 11%

3.NetApp 11%

4. Dell 9.4%.

3Par , with a revenue of less than $200 million, had a market share of 0.6%.

so the annual sales of external data-storage systems, as of second half of 2010, was roughly $33 billion.

do we know ... for sure

2010-08-22T11:00:00.000-05:00

"It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

---Mark Twain

McDonald's first Bond sale in Yuan ...

2010-08-20T15:03:00.002-05:00

... looks to me like another evidence of inflation rather deflation on a global basis.

as China wants to weigh in the global financial market, the debt market is much easier to start with. but that requires an attractive interest rate policy --- another excuse to keep the interest rate as low and as long as possible.

in plain English, the foreseeable future is that major economies around the globe would compete to do that stupid same thing all at the same time.

it even doesn't matter whether the commodities are priced in the U.S. dollar terms any more. the currencies , free exchanged or not, are depreciating for their own sake.

that's inflation.

Will China outbid BHP's offer to buy Potash

2010-08-20T14:40:00.002-05:00

at least that is what a lot of people are speculating. and that's the same question I've asked someone in China about it before BHP's offer went hostile.

here's what I've got.

China demand about 7 million tons of potash fertilizer per annum. while the demand is relatively stable through years, the import of that fertilizer is NOT increasing, contrary to a lot of people's perspectives. for the year of 2010, China's import number will be 3.4 million tons.

what is interesting that China's officials claimed that for years, China is searching for alternative sources for the traditional potash like those produced by Canada's Potash, in the meantime, no one official elaborate on what the alternative sources actually are.

yet, by the sheer glance of the import percentage and the total demand, China is less dependent on the fertilizer import as a matter of fact.

I read about the potash story back in 2004 when some Wall Street analyst sounded like they found a gold mine in fertilizer. and throughout these years, the valuation of these companies is always high. with a valuation like that , nobody can be sure whether it could be an investment for a long term.

or as it may seem --- a long long long term.

Android is NOT Only an OS for mobile

2010-08-19T13:27:00.002-05:00

i don't know if R.I.M or Nokia or Microsoft have already got it. Google's Android could mean far more than an Operating System for the mobile handsets.

In fact, Google itself doesn't even need its ChromeOS any more.

there will be someday that ordinary consumers don't even need the PC any longer. as long as the battery of his/her mobile phone or tablet could last long enough, the demand for PC will decline, so will the demand for non-Android operating systems.

look at the hardware of those handsets these days, it's far more powerful than the outdated PCs of years ago. it also means that these handsets could easily accomplished the tasks that people would originally turned to their PCs.

again, it doesn't announce a sudden death of PC , it depends on a lot of things, one of which is the battery technology. that's something that not even Google could do much about ... yet.

will Americans get it right?

2010-08-19T13:13:00.002-05:00

Taiwan, along with Malaysia, China and other non-Japan Asian economies, is reporting higher than forecast G.D.P growth rate.

theoretically, the U.S. now has one less reason to give up the zero-bound interest rate monetary policy any time soon. In theory, the U.S. could hang on for a big longer for other emerging economy to bounce back , in the meantime to hike their instructive interest-rate. It also means the exchange rate for dollar to those currencies will head nowhere but lower.

again, in theory, it's good for the U.S. export, therefore theoretically good for the U.S. economy.

but all is in theory only.

I have been talking about the inflation for a while, and i think professional financial guys are fooling Americans by selling them the cheap lemon of deflation for their own sake.

nevertheless, take this into consideration, if the current policy is going to working out to some extent, will the U.S. economy fare any better than if not?

it's a lot different between what is good for the U.S. multinationals and what is good for the U.S. export.

the financial guys won't tell the truth and the law-school graduated politicians have something else in mind.

what is at stake? a lot, among which is the U.S. economy ... for decades.

Tesla vs. BYD

2010-08-19T12:32:00.002-05:00

at a glance of any model from BYD, I was under the impression that this automaker is mimicking Toyota without any hesitation, inside out. yet the quality is far from Toyota could offer.

and it came to a territory that it has no chance to make a profit on the old strategy, just because the electric powered autos are a whole new business. can they finally pull this thing off? I don't know. It depends on how much they've got under the hood. Logic is --- if they are good at innovation, why did they produce every single model after Toyota's top seller?

on the other hand, Tesla made Roadster possible and sold 1,000 of those all electric powered sports cars. it has not yet turned into profit, but at least people there are doing something new.

Toyota has handed out a plan to joint develop an electric powered RAV4 with Tesla.

who is getting my vote, BYD or Tesla? the answer is clear.

the U.S. bankruptcies number

2010-08-18T10:33:00.001-05:00

reported by Reuters

For the year ended June 30, there were 1.57 million bankruptcies, up 20 percent from 1.31 million a year earlier.

Consumer bankruptcies rose 21 percent to 1.51 million, and business bankruptcies rose 9 percent to 59,608.

Nevada had the highest rate of filings on a per capita basis in the last year, with 11.74 per 1,000 people, while Alaska had the fewest, with just 1.58 per 1,000.

Among the most populous states, California ranked 7th in per capita filings, while Texas was 48th, New York 41st and Florida 15th.

human

2010-08-07T12:22:00.001-05:00

Every saint has a past; every sinner has a future. --- Oscar Wilde

Will Berkshire Hathaway choose a speculator?

2010-08-02T10:05:00.002-05:00

assuming part of the investment decision making responsibility?

According to this article, widely discussed last week, it could be.

By reading this guy's resume, only one conclusion is certain --- this is a speculator. And if Buffett could compromise on the deal of BYD, he could well compromise on this personal suggestion from his long term partner, Charlie Munger.

This will be a horrible decision.

Uncle Alan got it, finally

2010-08-02T09:23:00.002-05:00

Speaking on NBC's "Meet the Press" Sunday, Aug.1, Mr. Greenspan said something clearly.

To the ring wings:
"I'm very much in favor of tax cuts, but not with borrowed money" he said, adding that doing so normally "proves disastrous."

Greenspan believes the big problem facing the US economy is that it is very distorted, with the recovery limited to "large banks, large businesses and high income individuals."

Then to the left wings:
"There's nothing out there that I can see which will alter the trend or the level of unemployment," he said.

Why couldn't he have said when he was Fed Chief? What a pity.

flight to quality or a trap?

2010-07-20T12:14:00.000-05:00

admittedly, the European debt crises are real. but the so called flight to quality, namely, the fact that money hurried back to the U.S. Treasuries is way too unbelievable.

as a matter of fact, I don't think that's flight to quality, on the contrary, it looks more like a trap. no matter how, the major currencies are going to depreciate under the current development, and the U.S. needs a decling dollar while doesn't want to see a competing currency as an alternative world reserve currency.

allow for the fact that both S&P and Moody's are the U.S. rating agencies, both can contribute a bit to the desperate yet awkward need of uncle sam.

but take this into account. the U.S. will have to sell more debt than ever. As is true the U.S. needs a decling dollar to shovel up its trade imbalance and its fiscal deficit.

does this sort of flight to quality sound a bit weird to anybody? believe it or not, they are argueing about the inflation or deflation, and double dip or recovery. these guys really made me laugh.

Google's App Inventor for Android

2010-07-18T13:26:00.002-05:00

As reported by The New York Times, Google opened its DIY App Creation Software to users of Android handsets.

http://appinventor.googlelabs.com/about/

I think it's a sea change in the red-hot smartphone industry by far. One can create any software for the handset which is more and more like a computer today. Yet more, it demands almost none of the specific knowledge of programming at all. It's really amazing.

All other players, namely, RIM, Apple, Nokia etc., heads up!

debt issue and IPO

2010-06-20T12:50:00.002-05:00

probably the new wave of pending public debt issuance and some huge IPO could sop up some of the liquidity over-supplied.

this month, California will face the new budget for the next fiscal year. earlier next month, one of the four national banks of China will undertake its IPO, talking about hundred of billions of dollars.

successful or not, these activities may give markets an excuse to leave worries on inflation behind for a while.

iPhone4

2010-06-14T13:23:00.001-05:00

new front facing camera, sharper display, GPS module inside.

but, the battery is still a headache. In fact, it's a headache for all sorts of hand-held devices.

Andrew got the right questions

2010-06-01T15:52:00.003-05:00

... and probably the answers already.

In the latest NYTimes column published Tuesday,titled Answers on Credit Ratings Long Overdue, Andrew Ross Sorkin asked several interesting questions relating the business of credit ratings industry. Those questions should be long asked yet nobody did.

But the most interesting one is the last one. Surely that implication could be easily defended by a simple denial, but questions will be looming.

Maybe it's a sort of friendly warning.

I never ask a question like that. And I do have one of similar implication. It's something of the 1987 crash. I attended Berkshire's annual meeting in May. I was not surprised at all that for so many years , no one shareholder has ever asked such a question. And I won't ask about it in public.

Nothing is perfect.

2010-04-15T14:14:00.000-05:00

Nothing is perfect. So, I am nothing.

Paypal is such a junk

2010-03-28T12:59:00.002-05:00

I just tried to open a Paypal account to see if it is such a nonsense as reported recently.

The fact is --- it is.

After I signed up with my name , address, phone number, Paypal has already established four unsolved cases and put several limits on my new account. How efficient a system it is!

I need to "get verified" by linking my bank account or credit card to it, something I don't want to do. And I need to provide the "proof of address," even if that is also a part of privacy for the online purchasing experience.

But the most ridiculous part is that I am NOT even allowed to close my account now.

This looks more and more like a government bureaucrat, which cares nothing about people's privacy. And when things go wrong, they are NOT responsible for anything. You are on your own.

One tip for Paypal. If I am willing to provide my personal and private financial info to an online payment system, Google Checkout would be a better choice than Paypal.

GPS waypoint or POI

2010-03-19T13:01:00.003-05:00

One of the great things for Garmin GPS is Mapsource. The software for PC can do a lot of things for GPS users. One can browse maps on computer, search for waypoints and design routes, and so on.

But there are some instances in which the equipment couldn't work perfectly with the software. One example is that the transferred waypoints could not be imported to the equipment.

I find a solution for that.

Just search for the waypoints on Mapsource. Save the temporary file as GPX. Use Garmin's POI Loader to transfer the GPX file to the equipment.

Now the Point of Interest contains all the waypoints you designed on Mapsource. And it's located as \Garmin\POI\POI.gpi

Once you download POI files into your Garmin equipment, an option of "Custom POI's" will appear in either "Extras" or in "My Locations" under "Where to". This is where we may locate the imported POIs.

Want to transfer more than one GPX to the equipment and meanwile keep them as seperate files? Just rename the POI.gpi to something like POI-area1.gpi in equipment and the new POI file won't overwrite the old ones.

Garmin Mapsource install

2010-03-16T12:47:00.003-05:00

Without the setup CD, we can download the latest update from official website. Usually it is an exe file. Don't double click the exe or it would say it didn't find any older version of Mapsource.

Just right click the file and unzip the file to a directory, where we can see all the packed files within that update.

Some suggests to click the MAIN.msi and then the setup.exe to install the Mapsource into computer. But I found it didn't work since the installed software reported a runtime error.

The solution is a bit funny.

After clicking the MSMAIN.msi , I find the file folder in other partition on my harddisk. And by clicking the main program in that folder, the Mapsource is working already. In other words, all we need is to move the folder to somewhere feasible, and we don't need to setup the program anyway.

While the program report not finding any maps yet. We need to install the maps into the program.

1) Use Gmaptool to cut the map img file;
2) Use cgpsmapper to generate the mapset.tdb and mapset.img, the index of maps;
3) Use MapSetToolKit to install the maps to Mapsource.
Sometimes we need to unlock the maps first.

the map folder could stand alone from the Mapsource folder.
once the map is installed, open Mapsource and scale it down to 30km, the map appears in detail.

Language is no problem since all the lang pack in in dll form. The software will choose it when initiated.

So far I can search waypoint, build route, save routes and tracks to desktop. While the USB driver is not installed as it should be during a standard setup, it's no problem to save the routes and tracks into the GPS equipments.

rate raise? or prisoner's dilemma?

2010-02-25T15:17:00.002-05:00

Democrats think it is bad to raise rate because that would hurt the economic recovery.
Republicans think that low interest rate would be helpful to the U.S. export, because low rate means comparably cheap dollar.

So does China.

But there is a catch. Both the U.S. and China are unable to determine the perils of asset bubbles. In the U.S., the housing bubble was actually supported by the unprecedented rate cuts, although the price declined to some extent. In China, the efforts and measures to buoyant the economy during the world wide financial crisis are effectively pumping more liquidity to real estate, in short , China is making an old fashioned bubble with a new excuse. They just don't know it.

While the trade imbalance is mainly the focus yet a major concern that neither would mention, it is really interesting to see how these two economies are dealing with this prisoner's dilemma --- to raise or not to raise the rate.

Either way, they won't fare well.

10-K rather than offical annaual report

2010-02-01T12:00:00.002-05:00

10-K is the form that a listed Company filed with SEC. The standard form is usually more useful than a company's official release to the shareholders.

Here is how I find the SEC filings and sometimes turn them into PDF format.

go to sec.gov ;
find the "EDGAR filers", then in the side column of "Fillings & Forms", find the "Search for Filings";
click the link of favorite search criterion, usually the "Company or fund name, ticker symbol...";

sec.gov/edgar/searchedgar/webusers.htm

enter the company name in the search box, the result will display in the following page.
click the CIK link of the specific company, it will lead to the SEC filings easily.

there are several additional search boxes under the company official names.
enter "10-K" for the U.S. company's annual filing, and "20-F" for foreign company listed in the U.S. market.

the file format is either htm or txt. I prefer the htm. Open it and save the page as a single html and it is good enough to read, but sometimes, some people might like it in a more popular PDF format.

there are two free software for this task so that we could print virtually the html into the pdf. In fact the programs could easily save other Microsoft Office files into PDF as well.
1) CutePDF Writer
www.cutepdf.com/Products/CutePDF/writer.asp
2) PDFCreator
www.sourceforge.net/projects/pdfcreator/

Hope this could help a bit.

iPad, camera and GPS

2010-01-28T10:55:00.002-05:00

Something is notably missing in the iPad, Apple's tablet PC. I could understand why camera is missing. It depends on how users would like to use that camera.

Some users might like to take pictures of themselves, whereas others would like to shoot someone or something in front of them meanwhile viewing their screens. If both needs are going to be met, that means iPad would have to pack the cameras at both sides of the equipment.

Some critics noticed that the Flash format is not supported in iPad. To some extent, this is a problem, a headache for any web browsing experience.

Another feature missing is the GPS module. At the first glance, iPad looks to me like a good GPS navigator rather than a expensive e-reader. Should the GPS module be built-in, this equipment could take the place of any GPS navigators suitable for walking, driving, voyaging or flying. In the meantime it is a computer.

Then when I read about the price of six models of iPad, I got it. The price is already high. Maybe Apple didn't want the price to shy away customers by embedding more features into it.

everyone aboard, count me out

2010-01-16T12:54:00.002-05:00

Kraft is offering to buy Cadbury. Look who is on this deal in addition to the well-known.

Lazard ., Centerview Partners, Citigroup, and Deutsche Bank are advising Kraft.

Goldman Sachs, Morgan Stanley, and UBS are counseling Cadbury.

Seven other banks are part of a group of lenders for Kraft’s bid.

JPMorgan Chase & Co. and Bank of America Corp. are in discussions about financing a Hershey bid.

Bryon Trott is approached on the possible offer by Heshey.

John Paulson raised stake in Cadbury when Kraft made its offer hostile.

Bill Ackman re-built his position in Kraft and urged Kraft to use more cash in the offer rather than stocks.

Is there anyone who is NOT related in this highly expensive M&A? My sense was well illustrated in my post here. Of course I am NOT those who cannot afford this deal to fail.

Tax the banks

2010-01-15T10:44:00.003-05:00

Obama announced yesterday the financial crisis responsibility tax on banks with assets over $50 billion. It is estimated to be $90 billion throughout 10 years.

I don't think it will work. That's the short answer.

Banks' profitability now depends more on the securitization and trading of derivatives more than ever. Derivatives are one major culprit of the financial crisis in addition to a housing bubble. Logical speaking, you can't claim that the crisis is over at the same time you think that kind of securitization is not a problem.

Even if the tax finally comes in. How can you say that the problem is NOT coming back with it since the banks have to secure the profit by generating and trading more and more sophisticated derivatives.

Now I am really doubtful of those Harvard graduates. Business school or Law school, do they even know anything?

Windows 7 missed Advanced Search

2010-01-15T10:24:00.002-05:00

One reason that I like the grandfathered Windows XP is its advanced search option. You can search the files by date created, date modified and by sizes. I stopped some viruses and trojans. Simply searching throughout the system what are the files created between the specific dates could generate a lot of useful info on when and how the system is breached.

But I was a bit dissappointed by the state-of-the-art Windows 7, because it seems that the Advanced Search is now completely simplified. At the first glance, I think it's cool because whenever I hit the Win key, the text input in fact serves as the search and you can run any files or programs from there.

Nevertheless, when I have to search with more options , Windows 7 simply doesn't provides it. There are complaints around the internet, so I assumed that it's an old but useful function that Microsoft forget to put it in place.

Kraft raised the offer for Cadbury

2010-01-06T09:43:00.000-05:00

I don't know why Irene raised the offer. Every more pence that Kraft would go nowhere but the intangible called goodwill.

By the price today, that goodwill would be 13 times more than what Kraft would ever get from the deal. Call it permanently intangible.

Of course those who take the pleasure in bullying a Jewish woman won't ever mention that except addressing the offer as "derisory."

my blog reads more like twitter

2009-12-23T15:44:00.002-05:00

I'm not sure. But you can leave a msg of what you think in my Guestbook at the right end underneath "About Me".

It's so stupid that in English, a comma or a full stop must be placed inside of a pair of quotation marks.

Bill Gross the money man?

2009-12-23T15:41:00.002-05:00

Bill is a smart guy. I'm glad that his fund is now the biggest in history ever, $202.5 billion.

Yet the market is totally wrong. Probably it is why Gross agreed to start a whole new arm of equity funds for PIMCO several months ago.

Again, Bill is good.

has CNBC been right on anything?

2009-12-23T15:31:00.002-05:00

a new Ponzi Scheme probe reported on one of Faber's reports. high life, Bugatti. I can almost remember what he said about his yacht parking fee and the $20,000 tire replacement in the CNBC interview. Faber is a good reporter though.

another good reporter, beautiful as well, reported through two years about the Dubai miracle. now my dream girl has to go back there reporting the debt emergency.

and a lot of honest and hard working business reporters made the similar mistakes. just because they have to do it ... everyday.

more sales of Moody's

2009-12-23T15:29:00.001-05:00

as reported by news agencies. Berkshire's holding now reduced below 14%. More to go.

no "second wave" crisis?

2009-12-23T15:26:00.002-05:00

Treasury Secretary Geithner thinks so. Sure, no second wave of the old one, but the new crisis has been brewing more than a year.

Whether it is a stagflation or a lost decade is yet to be ascertained.

Wells Fargo, the last one?

2009-12-23T15:22:00.002-05:00

on the surface, Wells Fargo is the last one to announce the plan to return the TARP money, but as I can see, unlike others, Wells concerns are not in the pay or bonus limits. Wells is much better.

monetary out, fiscal in?

2009-12-23T15:17:00.002-05:00

should the fiscal stimulus be a stimulus, that would work, to some extent, but as far as i can tell, the stimulus is welfare spending rather than real stimulus. and the right wing is urging for a tax cut as usual. the left wing really doesn't know what they are doing.

America is at stake. shame on them.

the U.S. debt ceiling

2009-12-23T15:15:00.001-05:00

now at $12.4 trillion.

as i predicted two years ago in my blog, the ceiling would be lifted again and again.

Women reporters and business news

2009-12-07T14:52:00.002-05:00

Without these women reporters, I don't know how boring it would be to read a business news site.
Examples:
Jane Wells, FunnyBusiness.cnbc.com
Cindy Perman, Ponyblog.cnbc.com

Smart women, intelligent journalists. More sense of humor , and less ideology.

PIMCO to launch equity funds

2009-12-07T14:39:00.002-05:00

I'm more concerned about the fee structure. Talking about the talents they recruit, two from Franklin, the other is the former TARP head from Goldman.

And it is said to be actively managed funds. However, it's better than the hedge funds or private equity firms that attracted so much money in recent years.

There is some drawbacks as a professional money manager. One is the emphasis on the short term performance versus the fund's own policy. The other is the running costs of operations.

Anyway, Bill Gross looks like a smart man. I just hope he knows the answer.

alternative OS for NetBooks than ChromeOS

2009-11-23T14:38:00.002-05:00

ChromeOS is simply browser. I found Ubuntu Netbook Remix, which at least is an operating system. Firefox is built-in, and the interface is user friendly. And it works, unlike ChromeOS.

Google definitely got the wrong team to build ChromeOS.

marry the RIGHT person?

2009-11-15T10:42:00.002-05:00

During the Q&A session of a town hall event at Columbia University on Nov 12, there are several interesting questions answered by Mr. Bill Gates and Mr. Buffett as well.

One was from Glenn Hubbard, dean of Columbia Business School.

"Warren, one thing you said years ago that's always stuck with me is you never
know who is swimming naked until the tide goes out. And that, of course,
says maybe there's some value in knowing when it's going to be low tide.
It also says there's value in knowing context. How do we develop -- how do
we encourage business leaders who understand context and connect the dots?"

Hubbard's question is literally a smart trap. It was inquiring how a real investor to time the market. I think professor Graham's original quote could well answer the question --- "Pricing , rather than timing."

The other is from a student.

"Value investors, such as yourself, believe that fundamental analysis, deep
fundamental analysis is critical to intelligent investing. However,
you have said several times in the past that you have made very rapid
capital allocation decisions, sometimes in less than five minutes. I was wondering
exactly which data gave you confidence in your decision."

Again, a smart trap. Only this time, it went a bit closer to the valuation. I
think Mr. Buffett's answer would really make prof. Graham pround --- "50 years
preparation and 5 minutes of decision making."

Another one.

"To what extent do you guys think that business schools like Columbia were in
some sense responsible for what transpired in the credit crisis?"

I am so surprised that Mr. Buffett gave an answer I would never dare to say - "the best place to learn ethics is in the home."
In other words, if you can not get it from your parents, you can't get it from business school either. Education is really not just about an academic degree.

As for the life meaning findout. Mr. Buffett gave another impressive and straight answer --- Marry the right person.

Now this time, I have something to say. I know of none who doesn't think he/she married the right person when he/she gets married. They give it a serious retrospect when and only when the divorce is pressing. I wonder what advice Mr. Buffett will give on this pheonomenon.

housing bubble goes on

2009-11-15T09:44:00.002-05:00

Mortgage ceiling is now extended, according to The New York Times.

For much of the past two years, the government has, through Fannie and Freddie, agreed to buy mortgages of $729,500 or less for properties in high-cost housing areas like Manhattan and parts of northern New Jersey. That ceiling had been scheduled to be lowered to $625,500 at the end of this year, but last month Congress extended the higher limit through the end of 2010.

again, Jumbo loans are "conforming loans".

Also a report by The New York Times, the newly signed Worker, Homeownership and Business Assistance Act of 2009 into law, extending unemployment benefits by 20 weeks and renewing the first-time home buyer tax credit until April 2010.

According to the report by Gretchen Morgenson, there is a lock-back on losses in the law mentioned above.

a tax break that lets big companies offset losses incurred in 2008 and 2009 against profits booked as far back as 2004. The tax cuts will generate corporate refunds or relief worth about $33 billion, according to an administration estimate.

I really don't know what Americans are doing. On the one hand, people are reluctant to admit it was actually a housing bubble in the first place. Now that that bubble has burst already, people are re-tooling to keep the bubble re-emerge.

Natural economic cycles are not so good at dealing with those asset classes with a price easy to rise and hard to decline, aka. inelastic price. What people are doing aftermath is easy to understand but they seem to forget one more factor in economics --- the price of those assets classes has a leverage effect on the inflation.

Google Maps Navigation or Garmin Mobile XT

2009-11-14T13:20:00.002-05:00

Google just launched its GPS navigation software for smartphones around the end of October.
www.google.com/mobile/navigation

It has a lot of useful and state-of-the-art features, such as search by voice , satellite view, street view. etc. And it comes as a free service, which makes it a huge advantage over other fee-based GPS software and equipment providers such as Garmin and TomTom of course.

But while Google's doesn't need users to install the huge map files into the flash card inside the phones, it requires the equipment to connect internet as long as this GPS software is working.

This is the problem. Most people use GPS to navigate their routes while nothing but the GPS signal is available. I myself shut down the A-GPS function just for this reason.

Moreover, the map navigating through internet connection demands a lot of bandwidth and costs a large amount on the mobile charges.

Maybe I will have to wait for garmin to launch its own software for the Android system. It was reported that Garmin is working with Acer , who is about to release a smartphone based on Android system.

Dell to launch smart phone in China and Brazil

2009-11-13T09:36:00.002-05:00

according to Dow Jones newswire, it's reported as Mini 3, part of Dell's netbook series.

OS: Google Android.

Partners: China Mobile and Claro of Brazil(part of America Movil)

I don't know much of Brazilian mobile telecomm providers, but for China their 3G is a mess.

China Mobile --- TD-CDMA
China UniComm --- WCDMA
China Telecomm --- CDMA2000

And every mobile service providers don't like the wifi connection on users' handsets.

Anyway, good luck for Dell as a new comer in Android system.

Google Chrome OS is to launch 16-20 Nov.?

2009-11-13T09:06:00.003-05:00

According to this TechCrunch article, it is about to release in the third week of November. Yet more attention is on the supported hardware list.

It was reported as a Linux based operating system, with Google Chrome web browser centered, and Gnome as the user interface.

My cause and effect to explain a jobless recovery

2009-11-08T12:52:00.001-05:00

Here is my cause and effect to explain a jobless recovery.
1) lack of a real new growth engine in the economy.
2) accumulated effect of inflation on the wages.

translation:
1) people are depending on the old tricks to solve problems.
2) the job market are less and less attractive because of the high price level, price of labor.

Yet the right-wing calls for another tax cut, while the left-wing calls for a bigger spending, none of the problems could ever be solved.

the major difference between CBY and BNI

2009-11-08T12:23:00.005-05:00

as of Nov 6,2009
BNI CBY
P/E 18 72
Price/Sales 2.3 7.1
Price/Book 2.7 13.2
Times Interest covered 7 3.7

And the Cadbury board told their shareholders that Kraft's offer is "fundamentally undervalued". I would say, if Cadbury's board cares so much about shareholders' interest, why don't they let the shareholders vote for Kraft's offer? if they really care about shareholders' interest.

no one health care plan would work

2009-11-08T12:23:00.002-05:00

I just don't know how long people will finally realize this cruel fact.

There was an old east German joke:
Capitalism is the exploitation of man by man. Communism is the reverse.

Funny though, it actually tells us the truth. Should the problems of mankind not be solved in the first place, ideology is just a piece of joke.

Take that philosophy into health care debate, no one can get to the ideal or hypothetical goal unless the dark side of mankind was restrained.

Google Voice to Gizmo5, another way around

2009-10-31T12:05:00.002-05:00

Of course, you cannot verify the Google Voice setup with a Gizmo5 in the first place.

But once you successfully set up the account, Google Voice allows you to add an Gizmo5 number as a phone to ring.

Yet I have several SIP phone number to manage, and I don't want to install the Gizmo5 software, therefore, I looked for some other softphone so that it could handle all my SIP accounts.

I found 3CX, a softphone to switch between different accounts.

The major advantage of 3CX is:
1) It's free.
2) It can handle multiple SIP accounts.
3) It allows LAN SIP as well as WAN SIP.

Last but least, it looks like iPhone, and sounds really good.

analysis on HTX

2009-10-24T11:05:00.003-05:00

Hutchison Telecommunications International Ltd. (HTX)

At a first glance, with the share price at $3, the company is a bargain. Market cap is of 1/3 of its annual sales, and at a discount of 15% of its Book Value. The forward P/E (a $treet favorite) is a mere 3.5.

But, let's take a look at it.

------------Cash Flows-----------
In the recent three fiscal years, only one year's cash flow is positive, thanks to a one-time item of discontinued operation, which gave a positive lift on the earnings that year.

And if I point out this firm is more like a utility than an industrial company, things might be a bit easier to understand. Both the depreciation and the capital expenditure is huge in this biz, let alone the capex for growth.

-----------Return on Assets---------
In fact, a real investor could read a lot out of the Return on Assets and Return on Equity. In this case, HTX failed test again.

Should we put them in the background of cost of capital , it is clearer. The current cost of capital for HTX is around 5%. While the current return on assets is less than 3%.

The Times Interest Earned looks comparably safe at nearly 3.85, but that earnings is before the interest and tax. The confirmation comes from a brief survey on the profit margin and operating margin.

--------bargain? really?---------
Some analysis comes from the possible of HTX's sale of assets, the 51% stake in Partner Communication. HTX was reported to ask for a price of $1.38b. Meanwhile HTX's market cap is at around $1b.

It looks like HTX is getting ready to exit the Isreal market and to put more efforts in other emerging markets, well , through new capex of course.

But would the earning power on the relocation of capital generate real returns for its investors? we might find the answer in its scoreboard up till now.

So what will happen even if the sale of assets really occurs is something like this:
long term investment becomes cash with a multiplier along with retained earnings, cash and retained earnings are to be reinvested as capex, and finally cash becomes investment.

In plain English, it's really not too much to do with the equity holders if the earning power is poor.

Google fast flip

2009-09-15T13:27:00.002-05:00

Google releases News-Reading Service.
Along with its Google News (news.google.com), now the new feature is that readers can browse news more quickly and efficiently within its fast flip site.

fastflip.googlelabs.com

news pages are stored in PNG picture format, and can be browsed as slide show.

the experimental site categorized news under four main tags: Popular, Sections, Topics and Sources.

I find some sub-tags are really useful. i.e.
Most Viewed under Popular;
Business under Sections;
New York Times under Sources.

For the first time I go to this site, within a few minutes of browsing, I've already read a dozen pieces of news, and several full story after the links.

It is amazing.

Procter&Gamble sells drug unit

2009-08-24T13:47:00.003-05:00

$3.1 billion for the deal, $4 billion of debt financed by six banks, and run be Goldman.

the prescription drug unit generates $2.3 billion in revenue.
the deal could drive down PG's leverage as well as the revenue. speaking of the stock valuation, it means a lower price/book, yet a higher price/sales at the same share price.

in the case of PG, the financing burden or the interest expense is comparably low allow for the revenue. but apparently the debt size alone explained the gap between the return of equity and return on assets.

Berkshire "Goofed" on Derivative Risks?

2009-08-16T13:52:00.002-05:00

Well, that is what Reuters reported.
"Buffett's Berkshire: We Goofed On Derivative Risks." -- Reuters

Here is CNBC's BuffettWatch post:

Berkshire Hathaway: We Did Not "Goof" on Derivative Risks

And this is my comment on NYTimes' DealBook:
http://dealbook.blogs.nytimes.com/2009/08/13/berkshire-underestimated-derivative-risks/#comment-303337

The revealed detail is excruciating because
1) possible competition;
…on the mere condition that the potential competitors are able to read the details and understand the margin of safety in the pricing of those derivatives, case by case.
obviously, according to this Reuters report, their reporter is by no means able.
2) probable fraud scheme by others;
by and large, derivatives of all sorts are dangerous, especially when neither the seller nor the buyer cares about the margin of safety.
i’ve already read some pieces recommending long term options as an “investment” without mentioning a word of safety margin.
i believe Mr. Buffett knew that his explanation in the annual letter would be manipulated by those people and taken as an excuse to promote all sorts of derivatives.
of course, it’s excruciating.

Now my question is how can a news agency like Reuters become so speculative and implicit as groundless and irresponsible?

fiscal stimulus or break-back tax

2009-08-16T13:33:00.002-05:00

Fiscal stimulus means tax down the road. It's true anywhere in the world, especially major economies are laying out their own fiscal stimulus plans.

But there is another super heavy tax that is not yet noticed --- the inflation above acceptable level is a hidden ultra high tax on both income and capital gain.

Now that the Fed is comfortable with a 2% core inflation target, all I can tell is the headline inflation is killing down the road.

economic forecasting

2009-08-16T13:05:00.003-05:00

Economic forecasting makes weather forecasting look like physics.
--- Ben S. Bernanke

Yeah, economists can't work without ideology, economists must predict the future, economists have to use assumptions and simplify almost anything they don't like.

Wait a minute! are we talking about economists or speculators?

Fed extends the Treasuries buyback

2009-08-16T12:56:00.002-05:00

the current plan was $300 billion to the end of September. now it is extended to the end of October.

apparently, that covers the historically volatile month for the stock market. And November and December are usually less volatile because they are holiday season.

But the new plan was more than $1 trillion buyback starting in January. Meanwhile, other central banks are trying hard to keep their currencies as low as possible, so long as they could take advantage of U.S. economy's recovery.

I see no reason NOT to worry about the inflation pressure all around the world. All I know is that the fixed-income investments are gonna be killed, not to mention those zero-return investment like real estate.

small banks allowed to fail?

2009-08-16T12:40:00.002-05:00

FDIC took over Colonial Bank of Montgomery, Alabama.

an interesting question is if small banks are allowed to fail, who is going to assure the basic competition within the banking system? big banks who are not allowed to fail?

meanwhile, if the big ones are successful, is the real economy big enough to feed their appetite?
this by no means is capitalism.

super computer bullying

2009-08-04T01:44:00.001-05:00

there is fuss around reports that Goldman Sachs uses super fast computer to bully plain vanilla traders and enjoys the advantage of mili-seconds before others see the orders.

the funny thing is that if the general public act like a real investor, the super computers can’t bully anyone.

translated in an equivalent converse-negative proposition, the robo-trades could only bully the speculators successfully.

so , can’t be all bad when you see goldmine orcs in the wildness, no matter you like them or not.

talking about the mili-second advantage, i am surprised that there was actually a complaint. when the naked-short-selling was Orally banned permanently, i don’t remember that anyone complained about the fact that the settlement T+3 was left intact.

fracture

2009-05-23T11:45:00.001-05:00

broke my left leg, May 9
operation , May 14

hate this town more and more.

GS, GE, and op-ed

2009-05-03T15:08:00.002-05:00

i have read so many articles saying Berkshire was bottom fishing and was wrong.

here is my view.

The preferred of Goldman and GE.

From the very beginning, I strongly believe that the investment is rather a bailout. Without Mr. Buffett’s endorsement by real money, in the background of a frozen credit market along with a frightened stock market, even the most robust components of S&P500 would have been hurt much worse.

In this case, it’s all about timing, timing of bailout or not bailout.

with all of these in mind, it is not too hard to understand the op-ed that Mr. Buffett wrote for NYT --- Buy America, I am.

it must be something like:

- Warren, I need an op-ed to calm the whole world.

- OK, whatever you say, Gretchen.

again, it's a bailout.

i must admit that sometimes it's a lot of fun to be a "speculator".

double standard?

2009-05-03T14:48:00.002-05:00

derivatives , as anticipated, became a hot topic during the annual meeting of Berkshire Hathaway. On May, 2nd, a Saturday, people questioned Mr. Buffett and Mr. Munger on the derivatives position as well as the attitude toward the financial vehicle as a whole.

some might think of it as a double standard. i don't think so. here is what i left in the comment somewhere in the NYT's DealBook blog one day before the annual meeting.

--------------------------

I don’t think it’s double standard. Readers might find such an analogy between the 1934 edition of Security Analysis and the 1972 edition of Intelligent Investor on the subject of another famous derivative — stock option.

Who made Professor Graham change that a little bit? Who proved the existence of safety margin in some rare cases of stock option’s pricing?

By reading the letter in the annual report of 2008, I can’t help wondering whether it was Mr. Buffett himself. I couldn’t be happier to be a “speculator” in this case.

...

By the way, as a matter of fact, neither Professor Graham nor Mr. Buffett contradicted themselves. Both of the original ascertainments are 100% correct. Meanwhile , the margin of safety is useful only to investors, and useless to speculators.

In professor’s term: pricing, not timing.

---------------------------

here is Mr. Buffett's own words during the question and answer session.
"Picking bottoms is basically not our game. Pricing is our game, and that's not difficult."

dual-mandate

2009-04-20T10:03:00.000-05:00

When revered Paul Volcker popped a question of why Fed feels comfortable of the 2% of target inflation. Donald Kohn expained it as "more breathing room".

In other words, 2% and the so-called core inflation are mere excuses.

For so many years, people don't understand why economists in Fed didn't tell it straightly to lawmakers that the dual-mandate is a fantasy. Central banks could never fullfill both at the same time. Milton Friedman proved it as a fantasy before he got the Nobel Prize.

Now we know better. As Professor Stiglitz put it. They are too friendly to the $treet. That's the problem. Dual-mandate just gave them another good excuse.

Kohn said other central banks have no problem at setting the target inflation of something like 2%. Of course they don't. They are not Fed. And their currencies are not the greenback as the world currency.

Dudley, the New York Fed president, said Fed could charge interest on the excess reserve so as to control the liquidity supply. I don't feel that make any sense either. It sounds like more and more supply of liquidity, yet not any control at all.

how hard it is to do the right things?

2009-04-17T11:22:00.001-05:00

I read an interview by Bloomberg News of April 16. Nobel Laureate Joseph Stiglitz gave a key shot to the hidden flaws undergoing both in the financial world and in the economy.

People do not care that much about any change or changes. And the real problem, as far as I can tell, is that people is effectively trying to keep the bubble going.

Nevertheless, I do not share all the views from Dr. Stiglitz or Dr. Krugman, especially on the nationalization of banks, because that would declare the death of capitalism head to toe.

And there are debacles that the market or the economy cannot stand. For example, if the shareholders of some banks are wiped out, why should the shareholders of other banks stick with the equity any longer. With that domino effect occuring in the financial sectors, a real panic would soon spread throughout the financial markets all around the world.

Same reason applies to the situation if bondholders are forced to turn into the equity owner. Because it would mean that in fact all the original debt obligation had been defaulted. As far as I can see, U.S. doesn't by any means want to change the derivatives thinking throughout the financial system, and the derivatives buyers would have no reason to care about the final outcome of that sort of solutions. Whenever quick money could be made, who needs to know what, who, when or how.